ISLAMIC DEVELOPMENT BANK GROUP in Brief

Information Brochure

1425H (2004)

CONTENTS

1. INTRODUCTION ................................................................................................ 1 2. ENTITIES IN THE IDB GROUP .............................................................................. 3

2.1 ISLAMIC DEVELOPMENT BANK (IDB) ................................................................... 3

2.2 ISLAMIC RESEARCH AND TRAINING INSTITUTE (IRTI) ............................... 4

2.3 ISLAMIC CORPORATION FOR THE INSURANCE OF INVESTMENT AND EXPORT CREDIT (ICIEC) ........................................................................................... 4

2.4 ISLAMIC CORPORATION FOR THE DEVELOPMENT OF THE PRIVATE

SECTOR (ICD)................................................................................................................ 5 3. SALIENT CHARACTERISTICS ............................................................................... 6 4. ACHIEVEMENTS ................................................................................................. 6 5. SPECIALIZED FUNDS.......................................................................................... 9

5.1 ISLAMIC BANKS’ PORTFOLIO FOR INVESTMENT AND DEVELOPMENT (IBP) .................................................................................................................................... 9

5.2 UNIT INVESTMENT FUND (UIF) ............................................................................ 10

5.3 INFRASTRUCTURE FUND (IIF) ................................................................................ 11

5.4 AWQAF PROPERTIES INVESTMENT FUND (APIF) .......................................... 11

5.5 WORLD WAQF FOUNDATION (WWF) ................................................................. 12

6 AFFILITIATED INSTITUTIONS ............................................................................ 13

6.1 INTERNATIONAL CENTER FOR BIOSALINE AGRICULTURE (ICBA)......... 13

6.2 OICNETWORKS............................................................................................................ 14 7. FINANCIAL POSITION OF IDB GROUP ............................................................... 14 8. OPERATIONAL ACTIVITIES OF THE IDB GROUP.................................................. 16 9. SPECIAL ASSISTANCE OPERATIONS (WAQF FUND) ............................................ 17 APPENDIX: Country-level Membership in IDB Group................................................. 19 GLOSSARY.......................................................................................................... 20

ii

1. INTRODUCTION The Islamic Development Bank (IDB) Group is a multilateral development financing institution comprising four different entities: the Islamic Development Bank (IDB), the Islamic Research and Training Institute (IRTI), the Islamic Corporation for the Development of the Private Sector (ICD), and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC). The four entities, with IDB as the flagship, were established at different times in the history of the Group, each with its establishing instrument, objectives and operational modalities but sharing a common vision and mission statements.

ICD (1420H, 1999)

ICIEC (1415H, 1994)

IRTI (1401H, 1981)

IDB (1395H, 1975)

IDB Group

Vision

To be the leader in fostering socio-economic development in member countries and Muslim Communities in conformity with Shari’ah (Islamic law).

Mission Committed to alleviating poverty, promoting human development, science and technology, Islamic economics, banking and finance, and enhancing cooperation amongst member countries with our development partners.

IDB Group’s Vision and Mission Statements

1

The purpose of the IDB is to foster the economic development and social progress of its member countries and Muslim communities in non-member countries individually as well as jointly in accordance with the principles of Shari'ah. However, as a result of expansion and growth over the years, the IDB evolved into a Group engaging in a wide range of specialized and integrated activities such as:

Resource mobilization Public and private sector financing Investment Trade (and intra-trade) financing Insurance services Physical and Social sector

financing Research and training in Islamic

economics and banking Technical assistance support for

capacity building Technical co-operation among

member countries Scholarships for member countries

and Muslim communities Emergency Relief

The IDB Group is headquartered in Jeddah (Saudi Arabia) with three regional offices in member countries: Almaty (Kazakhstan), Kuala Lumpur (Malaysia), and Rabat (Morocco). It also has field representatives in eight member countries: Guinea, Indonesia, Iran, Kazakhstan, Libya, Pakistan, Senegal and Sudan.

Any country interested in the membership of the entity of the IDB Group is required to fulfil three conditions namely, membership of the Organization of the Islamic Conference (OIC), payment of its contribution to the capital of the entity, and acceptance of the terms and conditions that may be decided upon by the entity’s Board of Governors. (See Appendix for countries in the membership of the IDB Group) As at the end of 1424H (21 February, 2004), the IDB Group had a total number of 881 staff members comprising 408 professionals, 65 special category, 328 general category and 79 manual category employees.

2

2. ENTITIES IN THE IDB GROUP

2.1 ISLAMIC DEVELOPMENT BANK (IDB)

The IDB is the flagship of the Group and was established in pursuance of the Declaration of Intent issued by the Conference of Finance Ministers of Muslim Countries held in Jeddah in Dhul Qa'adah 1393H (December 1973). In Rajab 1395H (July 1975), the Inaugural Meeting of the Board of Governors of the IDB took place and on 15 Shawwal 1395H (20 October 1975) the IDB formally commenced operations. The purpose of the IDB is stated on page 1. Its functions, however, are to participate in equity capital and grant loans for productive projects and enterprises besides providing financial assistance to member countries in other forms for economic and social development. The IDB is also required to establish and operate special funds for specific purposes including a fund for assistance to the Muslim communities in non-member countries, in addition to setting up trust funds which are detailed in Section 5.

In the Board of its Executive Directors, there are seven permanent members from countries shown in the chart below.

Major Shareholders of the IDB

Saudi Arabia24.9%

Kuwait12.4%

Libya10.0%Iran

8.7%

Egypt8.6%

Turkey7.9%

UAE7.1%

Others20.5%

3

2.2 ISLAMIC RESEARCH AND TRAINING INSTITUTE (IRTI)

Established in 1981 (1401H), the IRTI undertakes research, training and information activities on economic, financial and banking issues. It organizes seminars and conferences on various subjects in collaboration with national, regional and international institutions. It also undertakes information activities such as development of information systems for use in the field of Islamic economics, banking and finance; maintain a database on experts, trade information and promotion system. The research activities of IRTI include organizing and conducting basic and applied research with a view to developing models and methods for the application of Shari’ah in the fields of economics, banking and finance. IRTI also develops the capabilities of personnel in Islamic economics to meet the research and training needs of Shari’ah observing institutions in member countries. Its research output takes various forms, such as in-house research papers, background and discussion papers, seminar proceedings, books of readings, lectures, translations and articles published in the IRTI journal “Islamic Economic Studies” which is a refereed bi-annual journal published in Arabic, English and French.

2.3 ISLAMIC CORPORATION FOR THE INSURANCE OF INVESTMENT AND EXPORT CREDIT (ICIEC)

The ICIEC was established on 24 Safar 1415H (1st August 1994) to enlarge the scope of trade transactions and the flow of investments among member countries. In pursuit of this objective, the ICIEC provides, in accordance with the principles of Shari’ah, export credit insurance and reinsurance to cover the non-payment of export receivables resulting from commercial (buyer) and non-commercial (country) risks. It also provides investment insurance and reinsurance against country risk, emanating mainly from foreign exchange transfer restrictions, expropriation, war and civil disturbance and breach of contract by the host government.

INSURANCE FACILITIES OF ICIEC a. Export Credit Insurance Services

• Comprehensive Short-Term Policy • Supplemental Medium Term Policy • Bank Master Policy • Documentary Credit Insurance Policy • Single Transaction Policy

b. Investment Insurance Services • Investment Insurance Policy (IIP)

c. Reinsurance Facility

4

The shareholders of ICIEC comprised 34 IDB member countries and the IDB itself alone contributing 50% of the capital. ICIEC commenced business in 1416H (1995) with three types of insurance policy, since then it has introduced new products, services, and facilities.

ICIEC's Operations

287289

13996 104

86

0

50

100

150

200

250

300

350

1419 1420 1421 1422 1423 1424

Hijra Year

US$

mill

.

Approvals Commit ment s

2.4 ISLAMIC CORPORATION FOR THE DEVELOPMENT OF THE PRIVATE SECTOR (ICD)

Founded in Rajab 1420H (November 1999), the ICD promotes the development of the private sector in member countries. Its objectives are to identify opportunities in the private sector that could function as engines of growth; provide a wide range of productive financial products and services; mobilize additional resources for the private sector in member countries, and encourage the development of Islamic financing and capital markets.

ICD's O perations

0

57.03

37.2

64.05

35.3

2 0 . 52 8 . 9 9

2 4 . 8

010203040506070

1421 1422 1423 1424

Hijra Year

Approvals Disbursement s

5

The breakdown of the authorized capital of

nt but are yet to ratify

3. SALIENT CHARACTERISTICS

he IDB Group is a unique multilateral financial institution in the sense

It uses modes of finance that are only Shari’ah-compatible for its

All its members are from developing countries. Accordingly, it uses

4. ACHIEVEMENTS

ome of the major achievements of the IDB Group since inception are

Significant growth in membership: IDB-from 22 to 55

Membership of the flagship entity (IDB) is global, spreading

ICD is as follows: Islamic Development Bank (50%), member countries (30%), and public financial institutions of member countries (20%). As of end-1424H (21 Feb. 2004), the membership of the ICD comprised 42 member countries, the IDB, and 5 public financial institutions. In addition, seven (7) IDB member countries have already signed the Articles of Agreemethem.

ICD’s FINANCIAL PRODUCTS &

SERVICES

a. Dir g

ect Financinb. Lines of financingc. Asset Management d. Structured Finance e. Advisory Services

Tthat:

operations.

the resources from the member countries that are better off to assist those that are less well off, thus making the IDB Group a model institution for South-South cooperation.

Sas follows:

countries; ICD-from 25 to 42 countries plus IDB and 5 financial institutions; and ICIEC-from 13 to 34 countries plus IDB (as at July, 2004).

across Africa, Asia, Europe and South America.

6

ubstantial growth in capital: Authorized, issued, subscribed

Regional distribution of IDB membership

Africa46%

Asia13%

CIS11%

Europe4%

Middle-East24%

Latin America

2%

Sand paid-up capital have increased considerably.

IDB IRTI ICD** ICIEC Authorized Capital

1 . 6 10 5.00 B -- 75.24 M. 0.00 M.

Subscribed Capital

7.96 B. -- 337.62 M. 96.99 M.

Paid-up Capital

2.72 B. -- 185.29 M. 72.43 M.

* M.= Million B.=Billion ** ICD’s amount is denominated in US$ but converted to ID at 1ID=US$1.48095 which

is the exchange rate of 9 July 2004.

he regional distribution of the IDB paid-up capital is as follows: T

Regional Paid-up structure of IDB

Latin America

<1%

Middle-East55%

Europe8%

CIS<1%

Asia10%

Africa27%

7

Systematic increase in the number of Islamic modes of finance: From three modes in 1975 to 12 by 2004.

Loan

,

Equity,

&

co-f

inan

cing

Leas

ing &

IT

FO

Profit-

Sharing

Inst

allm

ent

Sale

Exp

ort

Financi

ng

schem

e

Istisn

a'a

2 S

tep-

Mura

bah

a

Str

uct

ure

d

Tra

de

Financi

ng

Build

, O

per

ate

,

Tra

nsf

er

(BO

T)

1976

1977

1978

1985

1987

1996

1999

2003

2004

ubstantial growth in operations/sectoral financing: Net

ssigned AAA long term rating with a stable outlook to IDB by

Classified as a zero-risk weighted multilateral development

Mobilized resources through Sukuk totalling US$ 400 million

Formulated new mission, vision statements, and a strategic

Issued the Ouagadougou Declaration in support of the NEPAD

Increased collaborative financing with other development partners:

BADEA etc.)

Sapproval of IDB Group (excluding ICIEC operations) from inception up to the end-1424H (21 February, 2004) amounted to ID 26.1 billion (US$ 34.2 billion) for 4,400 operations in all sectors of member countries’ economies, of which ID 18.1 billion (US$ 23.8 billion) has been disbursed. AStandard and Poor's in December 2002.

bank under the new Basel Capital Accord by the Bank for International Settlement in April 2003.

from the international financial market.

framework for the IDB Group.

initiative of the African Union in Sha’aban 1423H (October 2002) and committed US$2 billion to projects in African LDMCs over a five-year period. The target amount of US$ 295 million for project financing for 1424H was exceeded by 19%.

Co-financed projects with the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the African Development Bank, Saudi Fund for Development, ECOWAS Fund, and the Arab Coordination Group (OPEC Fund, Arab Funds,

8

nhancing the regulatory framework and supervision of

. SPECIALIZED FUNDS

FOLIO FOR INVESTMENT AND DEVELOPMENT (IBP)

Islam nvestment and Development (IBP) is a ust fund established under Article 23 of the Articles of Agreement of

he IDB, as a Mudarib, manages the operations of the IBP which clude trade, leasing, instalment sale, equity, investment, profit-

sharing, and syndication.

Assisted in the establishment of a number of institutions with the objective of ethe Islamic Banking Industry such as (i) the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), (ii) the Islamic Financial Services Board (IFSB), (iii) the General Council of Islamic Banks and Financial Institutions (GCIBFI), (iv) the Islamic International Rating Agency (IIRA), (v) Liquidity Management Center (LMC), (vi) the International Islamic Financial Market (IIFM), and International Islamic Center for Reconciliation and Commercial Arbitration (IICRCA).

5 5.1 ISLAMIC BANKS’ PORT

ic Banks’ Portfolio for I

trIDB and pursuant to the Memorandum of Understanding signed by the Islamic banks in 1407H (1987). Its objective is to mobilize the liquidity available with Islamic banks and financial institutions and the savings of individual investors and channel them to finance trade of member countries.

Net A pprovals of IBP by year

(1408H-1424H)

0

50

100

150

200

250

300

1408

1409

1410

1411

1412

1413

1414

1415

1416

1417

1418

1419

1420

1421

1422

1423

1424

Hijra Year

Tin

9

The IBP has a fixed paid-up capital of US$100 million and a variable authorized capital of US$280 million. Up to the end of 1424H, IBP financed 214 operations for US$ 3.4 billion (ID 2.5 billion) in 24 IDB

ember countries. Pakistan and Turkey are the largest beneficiary

he Unit Investment Fund (UIF) was established in 1989 (1410H). Its bjective is to participate in the economic development of the IDB

e savings of institutional and dividual investors and investing these savings in both the IDB

illion. Twenty-seven institutional investors from 11 countries have bscribed to the Fund, which is listed on the Bahrain Stock Exchange.

akistan (US$ 263 million for 31 operations), Turkey (US$ 122 million

mreceiving 40 operations each at US$ 1.2 billion and US$ 453 million respectively. 5.2 UNIT INVESTMENT FUND (UIF) Tomember countries through pooling of thinmember countries and other countries. The IDB manages the fund as a Mudarib according to the regulations governing the Fund.

Net Approvals of UIF by year (1412H-1424H) (1990-21/2/2004)

140

160

0

20

40

60

80

100

120

1412

1413

1414

1415

1416

1417

1418

1419

1420

1421

1422

1423

1424

Hijra Year

ID m

ill.

The capital of the UIF has increased from US$ 100 million to US$ 325 msu Since its inception up to the end of 1424H, the Fund financed 144 projects amounting to US$1.3 billion (ID 936 million) in 22 IDB member countries. The three largest beneficiaries of the Fund are Pfor 20 operations), and Iran (US$ 157 million for 15 operations).

10

5.3 INFRASTRUCTURE FUND (IIF) Based in Bahrain, the Infrastructure Fund (IIF) was established in 1998 s the first-of-its kind private investment vehicle that focuses on

ber countries. Its objectives are seek long-term capital appreciation by making equity and equity-

s and US$ 200

structure-related sectors, as well as rivate Islamic financial and capital market institutions. So far, the

RTIES INVESTMENT FUND (APIF)

he Awqaf Properties Investment Fund (APIF) is a close-ended investment fund established in 1422H under Articles 2 and 23 of the

nderstanding between the Bank and Awqaf Ministries and Institutions

he Fund has been established for an extendable eriod of thirty years, unless terminated earlier, in accordance with the

ainfrastructure development in IDB memtorelated investments in infrastructure projects and infrastructure-related industries in IDB member countries and to promote the use of Islamic financing in infrastructure projects. The IIF provides attractive opportunity for governments and private investors to participate in a diversified group of profitable infrastructure projects. The IIF is a limited partnership with Equity Capital targeted at US$1 billion and a Complementary Financing Facility (CFF) of US$ 500 million. However, US$ 730.5 million of equity fund

illion of CFF have been raised. m The sectoral focus of the Fund is on power generation, telecommunication, transportation, energy, natural resources, petro-chemicals, water and other infrapFund has invested US$ 208 million in five equity-related projects in member countries.

5.4 AWQAF PROPE

T

Articles of Agreement of the IDB and pursuant to the Memorandum ofUof Islamic countries. Its objective is to invest in financially viable projects for the development of awqaf real estate properties in the member countries and other countries. Tpconditions laid down in its Regulations. The Fund is managed by the IDB as Mudarib.

11

The APIF has a subscribed capital of US$ 56 million and a paid-up capital of US$ 33.6 million. It has 13 participating institutions including

e IDB, ministries of Awqaf, Waqf organizations and Islamic banks.

5.5 WORLD WAQF FOUNDATION (WWF)

by s 204th session held in

umada II 1422 (September, 2001) was created to achieve the

ibution would be tilized to fund educational projects of the Muslim communities in

nts (Waqifs "Endowers") with at least a Waqf contribution of ne million US$ Dollar. This Board of Waqifs resembles a general

thSince inception, the Fund has financed 24 operations (11 for development of Awqaf and 13 for the management of the Fund’s liquidity) totalling US$ 93.3 million (ID 63.4 million) in 16 countries.

The World Waqf Foundation (WWF), whose by-laws were adopted the IDB's Board of Executive Directors at itJfollowing objectives: (i) to support the establishment of a network of waqf institutions that would perform Shari’ah-compatible charity activities, (ii) to sponsor and support waqf institutions, coordinate their activities and provide them with expertise, (iii) to extend assistance to students and provide scholarships in disciplines that can fulfill the needs of the Ummah, (iv) to establish and support educational, health and social institutions and programmes, (v) to contribute to the alleviation of poverty so as to enable peoples of the world overcome hardship and build their capabilities, (vi) to provide relief aid in the form of goods and services, and (vii) to help IDB member countries to enact uniform waqf legislations. The IDB has allocated US$ 25 million as an initial Waqf contribution to the WWF's Waqf assets. The proceeds of the contruIndia. The WWF is under the direction of a board composed of individual participaoassembly which elects a Board of Trustees that resembles a board of directors for the WWF.

12

6 AFFILITIATED INSTITUTIONS

6.1 INTERNATIONAL CENTER FOR BIOSALINE AGRICULTURE (ICBA)

The ICBA was established in Dubai (United Arab Emirates) in September 1999 as a non-profit international agricultural applied research and development (R&D) centre. The ICBA was established with funding from the IDB and additional support from the OPEC Fund, the Arab Fund for Economic and Social Development, the Government of the United Arab Emirates, through its Ministry of Agriculture and Fisheries, and the Municipality of Dubai. Its mandate is to develop sustainable agricultural management systems to irrigate food and forage crops and ornamental plants with saline water and to provide a resource of salt-tolerant plants for socio-economic development in arid and semi-arid areas and salt-affected areas of the Islamic World and elsewhere. The Center, which was earlier called the "Biosaline Agriculture Center", is initially focusing on forage production systems and ornamental plants in countries of the Gulf Cooperation Council and other parts of the Islamic World. The technologies that the ICBA develops will be of value globally and wherever farmers face problems of saline soils or irrigation with salty water. Thus, the focus of the ICBA is to generate new knowledge and technology in saline irrigated agriculture as well as to collect, synthesize and disseminate information in this field.

ICBA’s R&D PROGRAM

1. Plant Production and Management Systems 2. Genetic Resources 3. Information Management and Networking 4. Training & Extension.

In 1424H, ICBA mobilized resources totalling US$ 0.7 million for research projects and training activities. In addition, considerable progress was made during the year to develop a four-year US$ 3.79 million proposal to grow forage crops with saline water on marginal land in 6 countries in the West Asia and North Africa regions for submission to selected donors for funding.

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6.2 OICNETWORKS

The OICnetworks SDN BHD (OICnetworks) was incorporated in Muharram 1421H (April 2000) as a joint venture company owned by IDB (51 per cent) and the MIMOS BhD of Malaysia. The company became operational in Dhul-Qada 1421H (February 2001). The primary activities of OICnetworks are information services, E-commerce, internet connectivity, and consultancy services. Together, the IDB and MIMOS have pledged a total investment of US$14.5 million over a period of four years.

OICnetworks activities 1. OIC Exchange The OICexchange.com was launched in Jummad-I 1422H (August 2001) as a community portal to provide information and services to the OIC member countries. 2. OIC Trade The OICTrade was set-up in Sha'baan 1422H to enhance and facilitate trading between buyers and sellers, especially within the OIC market, via the Internet platform.

7. FINANCIAL POSITION OF IDB GROUP

The net incomes of IDB, ICD and ICIEC are shown respectively in the following charts.

Net Income of the IDB (1397H-1424H) (1976-21/2/2004)

-100

102030405060708090

1397

1398

1399

1400

1401

1402

1403

1404

1405

1406

1407

1408

1409

1410

1411

1412

1413

1414

1415

1416

1417

1418

1419

1420

1421

1422

1423

1424

Hijra Year

14

Net Income of ICD (1421H-1424H) (2001-21/2/2004)

00.5

11.5

22.5

33.5

44.5

542

1

422

423

424

US$ m

illion

1 1 1 1

Hijra Year

Net Income of ICIEC (1415H-1424H) (2001-21/2/2004)

-1-0.5

00.5

11.5

22.5

33.5

1415

1416

1417

1418

1419

1420

1421

1422

1423

1424

Hijra Year

The total assets of the IDB Group have increased significantly: IDB- from ID 445 million in 1396H to ID 4.5 billion in 1424H, ICD- from US$ 91 million in 1421H to US$ 286 million in 1424H, and

ICIEC- from US$ 105 million in 1415H to US$ 140 million in 1424H.

15

8

project financing 36 per cent,

t each, while 17 per cent went to Transport and Communication, 12 per cent to Agriculture, and 11 per cent to Industry and Mining.

. OPERATIONAL ACTIVITIES OF THE IDB GROUP

During the period 1396-1424H, the IDB Group (excluding ICIEC for reason of its distinctiveness) financed 4,400 projects for US$ 34.2 (or ID 26.1) billion; of which, in monetary terms, IDB’s net financing represented 99.5 percent (or US$ 34.1 billion) with ICD accounting for the remaining 0.5 per cent (US$ 185 million).

Net operations of the IDB Group (1396H-1424H) (1975-2004)

050

100150200250300350400

1396

1398

1400

1402

1404

1406

1408

1410

1412

1414

1416

1418

1420

1422

1424

Num

ber o

f ope

ratio

ns

No. of operations

In terms of the broad category of operational activities of the IDB Group, trade financing operations (in monetary terms) represented 61 per cent of the net approvals,

Year

technical assistance 0.5 per cent, and special assistance operations 2 per cent.

Mode-wise, Murabaha accounted for 61 per cent of net approvals, followed by Leasing 10 per cent, Loan 9.6 per cent, Installment Sale 7 per cent, and Istisna’a 5 per cent. The remaining modes accounted for less than 5 per cent each.

Sectoral projects allocation of IDB Group financing (excluding ICIEC and trade financing activities) shows that, in monetary terms, Public utilities and Social Services received 25 per cen

16

(accounting for 81 per cent of net trade approvals),

IBP (10 per cent), EFS (6 per cent), and UIF (3 per cent). Intra-trade financing represents 76 per cent of total ITFO/EFS approvals

inly to finance the Special ssistance Programme, the Scholarship Programme, and the Technical o

Res •

The schemes/Funds used frequently for trade financing in the IDB Group are ITFO

since 1397H.

9. SPECIAL ASSISTANCE OPERATIONS (WAQF FUND)

The Waqf Fund, formally called the Special Assistance Account, was set up in 1399H as a trust fund. Its total resources amount to ID 888 million, consisting of the Principal (ID 729 million), the Special Assistance (ID 76 million) and Least Developed Member Countries (LDMCs) Special Account (ID 95 million) as at the end of 1424H (21 February, 2004). The income generated from the Waqf Fund is used for social development programme (maACo peration Programme (TCP)) as well as for financing the Islamic

earch and Training Institute (IRTI).

The activities of the Special Assistance Programme from the Waqf Fund primarily cater to the needs of Muslim communities in non-member countries with particular emphasis on the social sectors mainly education and health. The Programme also aims at alleviating the suffering of communities afflicted by natural disasters or wars in both member and non-member countries.

No. of Special Assistance Projects (1396H-1424H) (1979-21/2/2004)

0

10

20

30

40

50

60

Num

ber o

f ope

ratio

ns

Member Countries Non-Member countries

1399

1401

1403

1405

1407

1409

1411

1413

1415

1417

1419

1421

1423

Year

17

• this,

US$ 370 million was approved for 374 operations in member

•

on) for

•

rogramme (61 for Ph.D and 76 for Post-Doctorate), and 79 students have also benefited from the M.Sc Sholarship Programme for the Least Developed Member Countries (as of August 4, 2004).

Between 1399H and 1424H, the IDB Group provided ID 413 million (US$566 million) for 1,017 special assistance operations: of

countries and US$ 195 million for 643 operations for Muslim communities in non-member countries.

Since inception of the Scholarship Programme in 1404H, the IDB has awarded scholarships to financially needy students in fifty-six (56) Muslim minority countries, including nine member countries. So far, the IDB has spent ID 38 million (US$ 50.5 millischolarship programme in favour of 6,827 students. The largest recipients of IDB scholarship were India (31%), Nigeria (11%), Philippines (6%), Afghanistan (5.3%) and Thailand (5.1%).

For the IDB higher degrees Scholarship Programme, 137 scholars have benefited from the Merit Scholarship P

18

APPENDIX: Coun evel Membership in ID Group try-l BCountry IDB ICD ICIEC

Afghanistan Albania Algeria Azerbaijan Bahrain Bangladesh Benin Brunei Burkina Faso Cameroon Chad Comoros Cote d'Ivoire Djibouti Egypt Gabon Gambia Guinea Guinea-Bissau Indonesia Iran Iraq Jordan Kazakhstan Kuwait Kyrgyz Republic Lebanon Libya Malaysia Maldives Mali Mauritania Morocco Mozambique Niger Oman Pakistan Palestine Qatar Saudi Arabia Senegal Sierra-Leone Somalia Sudan Suriname Syria Tajikistan Togo Tunisia Turkey Turkmenistan Uganda United Arab Emirates Uzbekistan Yemen

19

GLOSSARY

-Operate-Transfer (BOT): It is a contractual arrangement whereby a private sector entity undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof. The private sector entity operates the facility over a fixed term during which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable the private sector entity to recover its investment, and operating and maintenance expenses

Build

Hijra

dan, Shawal, Dhul

Inst

Islamic Di t of the IDB, which is

Istis

have been manufactured/constructed in

Leas

ng their right of use to the beneficiary for a specific

in the project. The private sector entity then transfers the facility to the government agency concerned at the end of the fixed term.

Year (H): An Islamic lunar calendar system comprising 12 months: Muharram, Safar, Rabi al-Awal, Rabi al-Thani, Jumadal-Awal, Jumada al-Thani, Rajab, Sha’ban, RamaQa’da, and Dhul Hijjah. It contains 354 days, which is about 11 days less than the Gregorian calendar system.

allment sale: A mode of financing whereby IDB purchases machinery and equipment, then sells them to the beneficiary at a higher price, with repayment to be made by instalments. The ownership of the asset is transferred to the purchaser on delivery.

nar (ID): The unit of accounequivalent to one Special Drawing Rights (SDR) of the International Monetary Fund (IMF).

na’a: A medium-term mode of financing. It is a contract for manufacturing (or construction) whereby the manufacturer (seller) agrees to provide the buyer with goods identified bydescription after theyconformity with that description within a pre-determined time-frame and price.

ing or Ijara: A medium-term mode of financing, which involves purchasing equipment and machinery and subsequently transferriperiod of time, during which the IDB retains the ownership of the asset.

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Line of Financing: A financing facility made available to financial institutions in member countries to finance projects and trade operations of small and medium enterprises.

: A mode of financing used by the IDB to finance projects in membe

Loanr countries, particularly its least developed countries. It is

interest-free and carries only a service fee intended to cover the

Mura ct of sale between a buyer and a seller in which a by a buyer and sells the goods

Stru

gements which ensure that (a) if a y, the financier (IDB) is automatically

cier (IDB) has recourse

Subs been subscribed by the IDB member counties.

Suku

Technical Assistance (TA): A mode of financing provided by the IDB

nts, as well as consultancy services for the supervision of projects.

Waqf: An endowment or a charitable trust devoted exclusively to specific purposes.

actual costs of administering the loan. The repayment period ranges from 15 to 25 years including a grace period of 3 - 7 years.

baha: A contraseller purchases the goods neededto the buyer on a cost-plus basis. Both the profit (mark-up) and the time of repayment (usually in installments) are specified in an initial contract.

ctured Trade Financing: The art of transferring risks in trade financing (e.g. transfer of foreign exchange, contract performance, etc.) from parties less able to bear those risks (the beneficiary) to the transaction in a manner that ensures automatic repayment of finance provided by the IDB from the underlying assets. It thus involves arrantransaction proceeds normallre-imbursed (repaid) and the facility is therefore self-liquidated, and (b) if anything goes wrong, the finanto some assets as collateral.

cribed Capital: Amount of issued capital that has

k: An asset-backed bond which is designed or structured in accordance with Shari’ah and may be traded in the market.

for conducting feasibility studies, detailed design and preparation of tender docume

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For enquiry about this booklet, please write to: Economic Policy and Strategic Planning Department Islamic Development Bank P.O.Box 5925, Jeddah 21432 Kingdom of Saudi Arabia Telephone: +966-2-6361400 Fax: +966-2-6366871 Telex: 601137IDB SJ Website: http://www.isdb.org/ Email: idbarchives@isdb.org

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